* Quebec government drops lawsuit against Air Canada
(Adds details from conference call)

By Allison Lampert

MONTREAL, Feb 17 (Reuters) - Bombardier Inc
received the first order in 16 months for its CSeries jets,
sending its shares up as much as 30 percent and overshadowing
news of lower-than-expected quarterly results and plans to cut
7,000 jobs.

The Montreal-based company said on Wednesday that it signed
a letter of intent to sell Air Canada 45 CSeries, with
an option for 30 more of the narrow body aircraft. The order is
worth as much as $3.8 billion based on the CSeries' list price.

Separately, the Quebec government, which gave Bombardier a
$1 billion lifeline last October, said it would drop a lawsuit
against Air Canada tied to its not living up to aircraft
maintenance commitments in the province. In return, the airline
agreed to conduct maintenance on CSeries in the province.

Shares of Bombardier, which also benefited from a planned
reverse stock split, closed up 21 percent at C$1.09 in Toronto
after climbing to C$1.17.
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